Enhancing accessibility and utilization of micro credit among women and youths in Valeska and Malula villages, Arumeru District, Arusha Region

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Southern New Hampshire University
This project paper examines the project, which was implemented during the life span of CED program September 2005 to January 2007 in collaboration with Business Entrepreneur Support Unit (BEST) the host organization. The project title is "Enhancing accessibility and utilization of micro credit among women and youths in the two villages of Valeska and Malula, Arumeru district, Arusha region". The survey was conducted in collaboration with BEST. The sample size was 89 respondents from Malula and Valesca villages, 4 staff from MFIs, 2 staff from Arumeru DCDD and 3 staff from BEST. The methodology used include structured interviews, direct observation, focus group discussions, key informants interviews, questionnaires, documentation and field visits. The main findings revealed the following as the main causes of inadequate/lack of micro credit in the two villages: -Most micro credit institution are not attracted to provide services in the rural areas due to higher risks related to rural activities; Remoteness of the villages that causes longer transport distances, travel costs due to poor infrastructures; High operational costs which force the interest rate to be very high, ranged from 20% to 40% for MFIs and 10% per year for the government funds. Therefore, micro credit institutions and the government credit funds should reach in the villages to cater for the poor people and not to concentrate in urban and semi urban. By doing so the women and youths will be able to run profitable business and improve their well-being. This project paper presents a comprehensive range of issues useful for purpose of policy formulation and practical interventions in the rural areas for micro credit institutions. (Author abstract)